Term Test 1_solutions

0506900 o terr2x12x1100x155010200

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Unformatted text preview: 1,100 a) 2012 Earned Premium: • Policies written on Jan 1, 2012 (fully earned by end of year) o Terr 1: 10 x ($1,000 x 1.0 + $50) = 10,500 o Terr 2: 15 x ($1,000 x 1.5 + $50) = 23,250 • Policies written on July 1, 2012 (only half earned by end of year, also base rate is now $1,100) o Terr 1: ½ x 12 x ($1,100 x 1.0 + $50) = 6,900 o Terr 2: ½ x 12 x ($1,100 x 1.5 + $50) = 10,200 • Total 2012 Earned Premium = 10,500 + 23,250 + 6,900 + 10,200 = $50,850 b) On‐Level Factor: • Easiest way to calculate is to use extension of exposures method • Policies written on July 1, 2012 are already at current levels so no adjustment needed • Policies written on Jan 1, 2012 need...
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This note was uploaded on 04/14/2012 for the course ACTSC 462 taught by Professor Wslennox during the Spring '11 term at Waterloo.

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